Price Competition When Consumersare Uncertain About Which Firm Sells Which Quality

In this paper we analyze the properties of price equilibria in a duopoly market where firms sell vertically differentiated products, consumers being uncertain about which firm sells which quality. Both existence and properties of price equilibria are characterized by the beliefs of the consumers' population about the distribution of quality between firms.     

Price discovery in the aluminum market

An extended version of the S. Beveridge and C. R. Nelson (1981) decomposition and a latent variable approach are used to examine how the noise content, and therefore the informativeness, of four aluminum prices that have been quoted at various times since 1970—the (now defunct) U.S. producer price, a transactions price reported in a trade journal, and the LME and Comex exchange prices. It was found that the start of aluminum futures trading in 1978 resulted in greater price transparency in the sense that the information content of transactions prices increased. LME prices quickly came to be more informative than published transactions prices. Although the initial Comex aluminum contract failed to attract liquidity and had low information content, the 1999 contract, trading currently, is as transparent as the LME contract. © 2005Wiley Periodicals, Inc. Jrl Fut Mark 25:967–988, 2005     

Which type of tourism matters to the regional economic growth? The cases of Spain and Italy

Recently, the attention given to the importance of tourism in economic growth has significantly increased. However, research in this area mainly refers to international tourism and to the national level. This paper focuses on the influence of tourism on the economic growth of Spanish and Italian regions. Both international and domestic tourism are analysed and geographical location criteria are considered. Dynamic panel data techniques are applied. The results reveal that both international and domestic tourism have a significant and positive role for regional economic growth in Spain and Italy, although the pattern of these effects differs among different types of region. Copyright © 2008 John Wiley & Sons, Ltd.     

Board of Directors and CSR in Banking: The Moderating Role of Bank Regulation and Investor Protection Strength

This paper brings together research on boards of directors as the backbone of corporate governance and corporate social responsibility (CSR) practices in the banking industry. The underlying idea is that some characteristics of bank boards, in particular independence and gender diversity, may impact the CSR commitments of banks. By making use of a sample of 159 banks in nine countries during the period 2004–2010, our empirical evidence suggests that banks with more independent directors and more female members on their boards incline toward socially responsible behaviour. Our results also suggest that institutional factors play a significant role in these effects. They show that in greater regulatory and stronger investor protection environments, board independence and gender diversity have more influence on the social behaviour of banks.     

Students' persistent preconceptions and learning economic principles

Economic views held by the general public tend to differ significantly from those of economic experts. Would these differences fade away if people were exposed to some economic instruction? In this article, the authors identify college students' preconceptions about economic issues at the beginning of the semester, verify their persistence throughout the semester, and test whether their beliefs are correlated to course performance. The authors conduct a survey at the beginning and end of the semester on a sample of first-year students taking an economic principles course. They find evidence of preconception persistence and reasoning inconsistencies, pointing to some cognitive biases as a plausible cause. Most students do not integrate the newly learned tools into their thinking process, even if they perform well in tests.     

Promotion and Coevolutionary Dynamics in Contemporary Capitalism

We characterize the dynamics of contemporary capitalist societies as emerging from the coevolution of five different subsystems: the intimate realm of individuals, the market, the state, civil society, and nature. We highlight a specific coevolution mechanism between some of these subsystems, which we call promotion. The insights from this coevolution approach are twofold. On one hand, from the ontological and heuristic perspectives, we argue that our proposal opens the possibility for constructing a general, interpretative framework in evolutionary economics. On the other hand, from a theoretical-explanatory perspective, we detect certain coevolution paths that may engender global pathologies in capitalist societies. We also suggest that future research may explore some normative implications of this approach, as well as alternative methodological strategies to develop it.     

Bank size and risk-taking under Basel II

We analyze the relationship between bank size and risk-taking under the Basel II Capital Accord. Using a model with imperfect competition and moral hazard, we show that the introduction of an internal ratings based (IRB) approach improves upon flat capital requirements if the approach is applied uniformly across banks and if the costs of implementation are not too high. However, the banks’ right to choose between the standardized and the IRB approaches under Basel II gives larger banks a competitive advantage and, due to fiercer competition, pushes smaller banks to take higher risks. This may even lead to higher aggregate risk-taking.     

EU telecommunications and electricity markets—Heading towards price convergence?

This paper investigates the sources of intra-EU price dispersion in two important network industries, namely telecommunications and electricity. Both sectors experienced substantial regulatory reforms over the past couple of years, resulting in the widespread introduction of competition in traditionally monopolistic markets. The empirical results reported in this paper confirm that the introduction of competition in these sectors resulted in significant downward price effects. Further progress with regulatory reforms in telecommunications and electricity is likely to result in further price falls in these sectors and reduced price level differences across EU Member States. The content of this article is entirely the responsibility of the authors and does not necessarily reflect the views of the European Central Bank.